Russia - Investment Opportunities

Developments in the Russian railway sector.

Russia’s railway system is undoubtedly fundamental to the Russian economy, with an impact on the growth rates of almost all other sectors. Russia operates the world’s second largest rail network, with 85,500 km of track across the world’s largest landmass. As such, it has very high figures for commercial tonnage carried, number and length of passenger journeys.

The state recognises the importance of the rail network to the economy, seeing it as a strategic national asset. Co-operation with European companies in fields such as manufacturing of high speed electric trains, developing braking systems and implementing communication systems is recognised as key to developing Russia’s transport system, improving quality and efficiency and managing infrastructure.

Click here to download this sector report.

‘Taste of Britain’ – coming to a supermarket near you soon…..

UKTI’s “Taste of Britain event” promoted British food & drink products to an audience in St Petersburg, the most dynamic retail market in Russia.

British participants of the Food & Drink mission to Russia made the most of this opportunity to network with potential local buyers and distributors at the British Consulate-General’s residence in St Petersburg. Their products proved to be a hit giving the local audience a “Taste of Britain” in Russia!

The UKTI Food & Drink mission event at the Residence kicked off on Tuesday 15 February 2011, with a talk by St Petersburg celebrity chef Ilya Lazerson about his love of British food. He treated the audience of chefs, restaurateurs, delicatessens and supermarkets representatives to stories of cooking for Her Majesty the Queen, and working in a top London restaurant. Aberdeen Angus beef, Stilton cheese, Cider and Worcestershire Sauce were the subjects of his affectionate musings. And he presented the guests with fish and chips, chicken curry and chocolate brownies.

This talk was followed by a mini exhibition demonstrating British products to the Russian audience and a networking session.

Russia offers excellent opportunities for first time exporters as well as established mainstream and speciality manufacturers in the Food & Drink Sector. The Russian consumer market is one of the largest in Europe and one of the most promising and fast growing in the BRIC group.

The food market is developing quicker than other Fast moving consumer goods (FMCG) segments and provides the largest contribution to the FMCG market value increase. St. Petersburg leads the way with the biggest number of retail chains and smaller outlets per capita in the country.

“Post-recession” consumers are beginning to switch from cheaper products to more expensive medium-and high-end options as their purchasing power recovers and consumption grows. The Taste of Britain event opened up many opportunities for premium products in the Russian market.

There are particular opportunities for:

• Organic foods,

• foods for special dietary requirements (e.g. gluten free, wheat free),

• convenience products,

• gourmet/exclusive/niche foods

• and light-alcoholic drinks (e.g. cider)

The British delegation demonstrated a number of products targeting the Russian market.

Halen Mon Sea Salt made a big hit with their exquisite range, including smoked sea salt which is used in the world’s top restaurants and is even sprinkled on President Obama’s caramel chocolates. Hawkshead relish was extremely popular, from the classic Piccalilli chutney to the innovative Lime and Lavender marmalade. Premier Foods, the producer of many famous British brands (e.g. Ambrosia Rice Pudding, Sharwoods Indian and Thai cooking sauces) also brought a huge product range with mass appeal.

Beverage Brands alcoholic fruit drinks WKD and Merrydown Cider added a fresh young taste. Twinings Tea, Balvennie Whisky and St Peter’s beers were also showing their wares, which are already selling well in Russia.

Contacts

Contact UKTI if you think your food & drink product could do well in the Russian market and consider developing your business here.

Svetlana Melnikova

UKTI Russia

Email: svetlana.melnikova@fco.gov.uk

Opportunities in the Russian Automotive Industry

Event in Solihull in March highlighting opportunities, support and giving delegates the chance to learn from speakers with first hand knowledge of the country and the sector.

Date: 23/03/2011 - 23/03/2011

Start/End Time: 9:30 - 15:45

Registration Open: 18/02/2011

Registration Cut Off: 23/03/2011

Event Organiser: UKTI Advanced Engineering/Kinetic Cubed

Location: Corus Hotel, Stratford Road, Shirley, Solihull, B90 4EB, West Midlands, United Kingdom

Main Contact: Bill Jones

Tel: 07788 917934

Email: bjones@kinetic3.co.uk

With a population of over 140 million and car ownership per head at less than half the average for the EU, Russia offers a large and attractive automotive market with outstanding potential.

• Estimated sales of new cars in 2011 2.5 million units, 30 per cent over the 2010 figure

• Two thirds of this market will be supplied either by foreign imports or foreign assembly plants in Russia

• The indigenous automotive industry has to retool and modernise to be able to compete

Opportunities arise for UK firms in all these areas as well as in finance, insurance, distribution, advertising and marketing.

The event will feature presentations covering key issues and challenges for UK companies, entering, operating or expanding in the Russian market and round table discussions with Russia experts and specialists on:

• Russian Automotive Sector Overview

• Opportunities

• Challenges of Doing Business

• UK Company Case Study

Expert speakers will include:

• Ivan Bonchev - Associate Director, Ernst & Young Transaction Advisory Group, Russia

• Tatyana Arabadzhi - Director for Russian Automotive Market Research and Auto Business Magazine

• Steve Truswell - Russia Trade Development Specialist, Kinetic Cubed

• Svetlana Bondarko - Senior Trade Advisor, Automotive, UKTI Moscow

• UK Case Study Speaker

Click here for further information.

Meet Svetlana Bondarko, Senior Trade Adviser, UKTI Moscow

Take this opportunity to meet Svetlana in March in Loughborough, London or Solihill and find out about developing your business in Russia.

Date: 15/03/2011 - 23/03/2011

Registration Open: 18/02/2011

Registration Cut Off: 15/03/2011

Event Organiser: UKTI Moscow

Location: Various, All, United Kingdom

Main Contact: Svetlana Bondarko

Tel: +7 495 956 74 52

Email: Svetlana.Bondarko@fco.gov.uk

Svetlana Bondarko, UK Senior Trade Adviser, Moscow, Russia is visiting the UK as part of a business development visit. She is interested in meeting UK companies who wish to develop their business in Russia.

She will be available to meet with companies in the Midlands or in London, 15-23 March 2011.

She will be attending the SERT (Sustainable Efficient Road Transport) 2011 in Loughborough. You can sign up to attend SERT 2011 at www.sustainableworld2011.com and meet her at this event.

She will also be taking part in the "Opportunities in the Russian Automotive Sector" events in London andSolhull where she is also available for meetings.

If you are interested in setting up a meeting please contact her directly.

Environment & Water Opportunities in Russia

The Russian Government sees the improvement of the environmental situation in Russia as a top priority.

The Ministry of Natural Resources of the Russian Federation developed the legislation to enhance the system of ecological monitoring and also to introduce the system of ecological audit and financial incentives for companies to implement the advanced environmental technologies. The legislation is planned to be adopted in the first half of 2011. Significant increase of environmental fines is also planned to take place in two stages – in 2012 and 2014. Russian Government expenditure on environmental protection in 2009 was about 6,8 bln GBP.

Download full PDF Environment & Water Opportunities in Russia

Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including:

Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, and support during your visits overseas.

Export Marketing Research Scheme. In depth subsidised research service administered by the British chambers of Commerce on behalf of UKTI

Contact your local International Trade Advisor from the contacts drop down menu if you are interested in accessing these services, or for general advice in developing your export strategy.

Russia has a young financial & legal services sector that offers a range of opportunities for international and domestic companies, particularly in the light of Russian Government plans to develop International Financial Centre in Moscow.

Like all major economies, Russia was affected by the recent global financial crisis. However it is widely agreed that the Russian government handled the crisis in the banking sector well, moving quickly to provide timely loan guarantees and, unlike in other countries, state support for the banking sector did not involve the acquisition of equity stakes. Only a small number of banks were taken into state ownership during the crisis.

Download full PDF Financial & Legal Services Opportunities in Russia

Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including:

Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, and support during your visits overseas.

Export Marketing Research Scheme. In depth subsidised research service administered by the British chambers of Commerce on behalf of UKTI

Contact your local International Trade Advisor from the contacts drop down menu if you are interested in accessing these services, or for general advice in developing your export strategy.

Both overseas market briefings will give details of business and supply chain opportunities, provide case studies, and discuss significant infrastructure investments and other major projects.

Date: 06/04/2011 - 06/04/2011

Registration Open: 12/01/2011

Registration Cut Off: 30/03/2011

Event Organiser: UKTI

Location: Birmingham, West Midlands, United Kingdom

Main Contact: Christel Moustacas

Tel: 0207 298 6416

Email: cmoustacas@mta.org.uk

Russian Overseas Market Briefing

Date: 6 April 2011

Overseas market Russia

Location: Birmingham

Venue: TBC

UKTI specialist Paul Corcut

Time: 1.30pm – 4.15pm (lunch provided from 12.30pm)

Cost: £42 (MTA members) and £54 (Non-members)

SPECIAL OFFER - Book both sessions for a reduced rate:

£70.80 (MTA members) and £94.80 (Non-members).

Following the success of the Brazilian market briefing, the first in the ‘Go, Export and Survive’ series, the MTA in partnership with UKTI, is pleased to announce the date for the next two overseas market briefings. The next two sessions will cover China and Russia and will be led by Jeremy Gordon and Paul Corcut, UKTI Business Specialists.

Both overseas market briefings will give details of business and supply chain opportunities, provide case studies, and discuss significant infrastructure investments and other major projects. The case studies presented by business entrepreneurs will provide practical advice, examples and guidance in approaching these overseas markets.

Don’t miss the opportunity to meet the UKTI business specialists face-to-face, and ask your questions about the Chinese and Russian markets, helping to raise your level of awareness on trade opportunities and how to exploit them.

Both briefings will take place in Birmingham on 6 April 2011 (venue to be confirmed).

Spaces at these informative events will be available on a first-come, first-served basis.

Click here for further information.

Aerospace opportunities in Russia

Latest overview of market potential for the aerospace sector in Russia.

Aerospace is one of the Russia's highest value adding manufacturing sectors.

It is estimated that Russia will spend $6.3 billion to support and develop its aviation industry in the next few years.

Russian manufacturers are looking to replace and upgrade equipment and source modern materials, components, and technologies for their products.

It has been stated that Russia expects to become the world’s third largest aircraft manufacturer by 2015.

Our report provides an overview of the market including:

• Why you should look at the Russian market

• opportunities for UK suppliers

• major events and activities

• UKTI contacts

The briefing is available by clicking here.

Join our mission to identify key players, decision makers and potential clients in Russian companies located in the Samara industrial region of Russia.

Date: 15/03/2011 - 16/03/2011

Registration Open: 16/12/2010

Registration Cut Off: 15/03/2011

Event Organiser: UKTI/MTA

Location: Russia

Main Contact: Christel Moustacas

Tel: +44 (0)20 72986416

Email: cmoustacas@mta.org.uk

Identify new business partners and clients!

Do you want to benefit from the opportunities to deliver your message to both key players and decision makers of Russian companies located in a strong industrial region in Russia, Samara.

As part of the programme, you will be able to attend pre-arranged one to one meetings to discuss your business needs in more detail.

The event will give you the opportunity to promote your products and company, to gain exposure and visibility in front of local Russian businesses and to network with international and local companies’ representatives from a variety of senior-level positions. Information on business activities/projects opportunities within the manufacturing/engineering sector in Samara will be discussed.

The seminar will highlight UK expertise in the advanced engineering sector focusing on Machine tools, cutting tools, tooling, measurement tools and instruments, industrial software, equipment refurbishment for various engineering sectors including automotive and aerospace.

The Russian outward mission will consist of company participants and their products’ capability to the Russian enterprises on the first day of the event, following the presentations held in the morning on th March, one to one meetings will take place in the afternoon for the UK and Russian companies to discuss in more detail their business needs/requirements.

Off-site visits will be held on the last day of the event for UK companies to view the factories’ floor of Russian companies and provide them with a good insight of the machine tools they utilise and their needs for new products.

Places are limited and participation will be based on a “first-come, first-served basis”.

  Click here for further information.

Education Forum incorporating International Student
Krasnodar Expo Recruitment Fair (17-19 March 2011, Krasnodar)

Russian education specialists School of Thought 2000 Ltd, in collaboration with the Krasnodar Regional Government and Krasnodar Expo invite you to take part in the biggest annual education and training event in the South of Russia, and to make your mark on growth and development of this exciting region

  Click here for further information.

Russia - Co-operation Opportunity with Russian Energy Company

Independent Russian power/energy efficiency/consultancy company is interested in cooperation with UK companies working in related fields.

One of the regional leaders in the field of independent power in Russia is interested in developing links with interested UK companies. Its main business activities include: energy consulting, energy efficiency, general contracting, turnkey construction and service.

The Russian company has commissioned:

• More than 350 objects

• 5000000 m2 total surface

• 900 MW total installed capacity

• 70 km total gas lines

• 150 km total heating lines

It implements all types of technical systems in building, incl: gas supply, electrical power supply, independent (distributed) heat- and power, HVAC, mini heating plants, infrared heating, fuel storehouses, water supply and water drainage.

The company is interested in co-operation with UK companies working in the related fields (incl. equipment and technology suppliers, service providers). The company has experience in working with foreign suppliers.

Click here for further information.

New Mayor of Moscow orders 50km of metro lines to be built by 2014, funds to come from PPP

New Moscow Mayor Yuri Sobyanin ordered extending the metro lines beyond Moscow's boundaries to its satellite communities. Mr Sobyanin called for modernisation of the construction process, increasing the pace of works and implementing cost-efficiency approach to the whole construction process.

The Mayor of Moscow mentioned that contractors will be chosen on the basis of a transparent international tender that would encourage big foreign companies to take part in the construction of Moscow metro. He also pointed out that contractors building new metro lines are expected to display high labour productivity and have the most advanced machinery. Quote: “We should revise the existing politics, designing methods, organization of metro construction, and employ new technologies, revise its organizational structure which should put the pendulum in motion anew,” which will require significant investment into a number of areas, including upgrade of equipment, design adjustments, development of cost-efficient approach, etc.

Moscow Government will allocate funds for the construction of new metro stations. However, the project will require investment both from the city subsidies and private investments. According to the announcement of Mr Levitin, Russian Transport Minister, “the metro has stricter security rules, but it is still possible to borrow funds through a public-private partnership and even to build parallel lines in the metro”.

Click here for further information.

Three-Bladed Propellers for Seaplanes
Russian seaplane design and production company seeks suppliers of three-bladed propellers for already designed seaplanes of different configurations as well as business partners for expanding the seaplane business overseas.

A Seaplane producing company, which is a dynamically developing new enterprise created in 2008 on the basis of the public design bureau, has developed more than 15 experimental seaplanes, some of which were certified and are now built in series in Russia, Chech republic and China. New model are under design, the latest one completed in 2010.

The company is fast developing now and seeks new business partners to cooperate on the issues of:

• Propeller import for exiting seaplanes

• New seaplanes designing and production

• Market expansion

Engine power: 64 hp, 80 hp, 100 hp 

Propellers required:

• three-bladed fixed-pitched propellers with a change in the angles of setting on the earth;

• three-bladed variable-pitch propellers with electrical (hydraulic) drive

All of them three-bladed with the required metallic edging of leading edge, diameters of propellers are at the minimum = of 1860 mm. the maximum = of 1920 mm

Engine power: 120-180 hp 

Propeller required: metallic propellers

Criteria of choosing a propeller:

• full thrust in the cruise setting (cruising engine torque)

• required engine power

• screws with the full thrust with the takeoff mass of 500 kg.,1000 kg.,1 500 kg., 2000 kg.

Other spheres of interest in further development:

• the creation of enterprise for production of two and four-place helicopters;

• the creation of enterprise for the production of the six- and eight-place aircraft

• of the local feeder lines;

• the creation of local airlines for introducing aviation equipment produced

Investments welcomed into:

• bringing seaplanes to the marketable form satisfying most experienced user;

• bringing seaplanes to the certification of the type in the country of production;

• creating the service centres in the countries with the high consuming capacity after creating a preliminary patent in the market-developing country and certificate of the type;

• creating training centres in the countries of large consumption

• creating the Complete Knock Down (CKD) centres of seaplanes in the large markets of consumption

Click here for further information.

A river passenger vessel design company is wanted.

Vessels are needed for the new route which will serve cruise tourists and other tourists of St Petersburg, and will help tack traffic congestion in the city centre. A new river port is constructed for the route.

Expected Timeframe: 16 months to design and build a prototype of a river ship. 6 months to build one ship afterwards. Orders may be placed on several shipbuilding plants which meet the standards.

Vessel Characteristics should include:

• "river-sea" (for transportations in Gulf of Finland

• A45-5 type of vessel

• Passenger capacity up to 150 persons

• "O" class 2 m wave passability

• 1.5 m draft

• Up to 40 knots speed

• Air conditioning

Background:
St Petersburg will create a new system of river transportation, which includes creation of a new River passenger port on the territory of the Sea Passenger Port “Marine Façade” by 2013 and construction of River Vessels. The new route will serve cruise lines tourists and other tourists of St Petersburg, and will help tackling traffic congestion in the city centre. The new River port will occupy 3 hectares on the newly reclaimed land, will have 10 wharfs, investment to amount over £40 mln.

Available fleet consists of vessels of the “Meteor” type which were built in 1971-1981, many vessels are in a bad technical state (70-95% depreciation), and are not equipped with air conditioners and comfortable seats. Boarding means are old and do not meet European standard of quality. Waves in the Gulf of Finland often exceed 1.5 m, making it impossible for vessels of the “Meteor” and “Neva/Moskva” class to sail in that water area. New vessels are to be constructed.

Expected Period of Design: 7 months. Period of building of the first ship is 9 months, a serial ship will be build for 6 months. The cost of design is planned to amount to 20% of the vessel cost.

Click here for further information.

Tax Benefits for Production Localisation in the Samara Region in 2012

Russian Government in the Samara Region (Togliatti) will be offering taxation benefits for setting up in the region.

A Manufacturing Special Economic Zone (SEZ) is being set up by the Russian Government in the Samara Region (Togliatti) to start functioning in 2012. Companies localising their production in SEZ will enjoy the following benefits:

• exemption from property tax for up to 5 years

• exemption from the land tax for up to 5 years

• reduction of profit tax to 15.5% for 5 years

• free customs zone for 5 up to 5 years

• other privileges within the existing law in force

11 agreements with foreign and Russian investors have already been signed.

Around £850 million will be invested. For the start, it is intended to localise manufacture of vehicle components for Renault-AutoVAZ and Sollers-Fiat. Aerospace engine's gas-turbine manufacturers will enjoy benefits of SEZ too. It is also intended to develop chemicals sector in this SEZ to begin with joint production of tyres by Pirelli and Rostechnologiyi.

Infrastructure will be built on the Government's budget account. The Government will allocate about £1.45 million for road building, energy supply facilities and other necessary infrastructure.

Click here for further information.

Further iInformation on investment opportunities in Russia can be found at:

Russo-British Chamber of Commerce
Web: www.rbcc.com

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